Peter Drucker Sets Us Straight ( On jobs, debt, globalization, and recession)

Fortune Magazine ^ | 12 October 2003 | Brent Schlender

[shrinkermd]

Marvelous article by a marvelous man. Fortune costs a pittance but remains well written, insightful and helpful to anyone who invests or thinks about current economic and political conditions.

[Support Free Republic]

Rank	Location	Receipts	Donors/Avg		Freepers/Avg		Monthlies
39	Colorado	40.00	2	20.00	293	0.14	125.00	9

Thanks for donating to Free Republic!

Move your locale up the leaderboard!

[backhoe]

Information technology forces you to organize your processes more logically. The computer can handle only things to which the answer is yes or no. It cannot handle maybe. It's not the computerization that's important, then; it's the discipline you have to bring to your processes. You have to do your thinking before you computerize it or else the computer simply goes on strike.

Eerily enough, I recall a snippet from a book whose name is forgotten, written ( possibly- it's been decades ) by Roberto Vacca, which asserted that it wasn't "computerizing" a business that made it more efficient so much as it was the re-thinking of processes necessary to implement the computer's use.

A streamlining of how things were done that eliminated redundancies, cut out deadwood, etc.

[ikka]

94-year-old?! Is this the same guy who wrote "In Search of Excellence"?

No, that was Tom Peters. But Drucker wrote a lot of other books and articles and pointed out many trends. I believe he got his education in Vienna, in the 1920s.

[truth_seeker]

94-year-old?! Is this the same guy who wrote "In Search of Excellence"?
No.
Authors were:

Thomas J. Peters and Robert H. Waterman, Jr.

Drucker has been in the highest tier of Business and Management thinkers, writers, teachers for many decades.

And he is insightfully optimistic, in this interview. Sharp for 94.

[Billthedrill]

You are absolutely right.

You have to do your thinking before you computerize it or else the computer simply goes on strike.

I've been an IT professional for a quarter-century, and this statement applies to everything from applications design to systems engineering. If you haven't thought it out before it hits the processor, the only cure is to throw obscene and unnecessary amounts of money at the problem or give up and start over. I've profited from both.

[freekitty]

Peter Drucker is one of the greats.

[backhoe]

What I vaguely recall ( this was about 30 years ago, in the era of mainframes ) was that he also asserted that sometimes the step up to computers was not even necessary- streamlining the flow of information was sometimes enough to get the desired efficiency.

I *think* the book was "The Coming Dark Age"-- but I wouldn't bet on that.

[TrueBeliever9]

I attended a lecture Drucker gave at Wharton in 1990 or 91 (can't fix the date). He spoke for over an hour without one note and he was superb! You could hear a pin drop in the hall! His books are still unsurpassed in depth and thoughtfulness. Peter Drucker is an American treasurer!

[Cold Heat]

I will bump this one!

[RAY]

Thanks for the post. A very interesting take. Thought provoking - different from some of my impressions.

[Eric in the Ozarks]

I get Peter Drucker and Michael Porter mixed up. Have books from both and like Porter best.

[hedgie]

Good article, but I think he may have it backward about owing debt denominated in USD as opposed to currency. My understanding was always that issuing debt denominated in foreign currency is what got you in trouble.

If the US issues debt denominated in dollars then those dollars have to be repatriated in the end of the day.

The vast majority of Japan's debt is denominated in Yen by the way. Dollar denominated bonds are typically issued by emerging countries.

[Jabba the Nutt]

I think India's progress is far more impressive than China's.

India is a democratic country with more individual freedom than China. Freedom wins every time its tried. Go India!

[Lael]

In part this is because knowledge work by definition is highly specialized, and that means that the utilization of the knowledge worker tends to be very low.

Wow!!!

This slug was one of the dudes that tried, several decades ago, to "cool out the mark [manufacturing workers] by telling them to "retrain" and become Knowledge Workers.

NOW, he says Knowledge Workers are abysmally UNPRODUCTIVE and Thank G-D for OUTSOURCING!!!

Talk about Chutzpah!!

[shrinkermd]

"Good article, but I think he may have it backward about owing debt denominated in USD as opposed to currency. My understanding was always that issuing debt denominated in foreign currency is what got you in trouble.

That is what I thought as well. Perhaps some more will comment on this. Thanks for the courage to dispute this portion of Drucker's remarks.

[Lael]

several decades ago = 1966!

[firebrand]

He spoke at my older sister's high school graduation (his son was in her class). Little did we know who we were listening to. Most of it went right past us--past me, anyway.

[bvw]

... productivity in white-collar work ... whenever we look at it, it is grotesquely unproductive ... productivity is dismal. In part this is because knowledge work by definition is highly specialized, and that means that the utilization of the knowledge worker tends to be very low.

The inefficiency of knowledge workers is partly the legacy of the 19th-century belief that a modern company tries to do everything for itself. Now, thank God, we've discovered outsourcing, but I would also say we don't yet really know how to do outsourcing well. Most look at outsourcing from the point of view of cutting costs, which I think is a delusion. What outsourcing does is greatly improve the quality of the people who still work for you. I believe you should outsource everything for which there is no career track that could lead into senior management.

Okay. This is typical Drucker. He does identify and have an insight about a failing in business. But he misses why it is there. He brushes off a "legacy of the 19th-century belief" -- aw gee, if it were ONLY such. What other 100 plus year old faulty legacies are there in business? I can't think of ONE.

He doesn't really understand WHY the problem has lasted. In fact, given that the highest skill craft workers are also knowledge workers -- designers, tool makers, etc and those trades have been around for one hundred plus as well, you might wonder why this cultural problem in business hasn't already been addressed and healed long ago.

And failing to give a reason, to identify why the problem is sustaining, if not growing, he has no solution to it.